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I will admit that I could have got SpaceX wrong. I repeatedly told my esteemed Editor Isaac McIntyre on the HotCopper Wire podcast multiple times across the last few months that SpaceX “has at least six months in it,” but now I’m not so sure.
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One month after it listed on the NASDAQ – in what was the world’s largest IPO ever, valuing SpaceX at more than a trillion US dollars – one month after all that, SpaceX has proven to be quite boring.
Technically, it’s down -30% over the last month with prices closing at US$139/sh over night on Wall Street.
Whether or not SpaceX is “below its listing price” is ultimately a philosophical debate – SpaceX was filed to list at US$135/sh, and oversubscription saw shares hit the market hot around US$160/sh.
Almost immediately the stock shot up with satisfactory-enough volatility, soaring to US$200/sh four days after listing in what was a multi-day rally for the world’s biggest IPO on the world’s biggest stock market.
And that’s exactly what I expected. But following a pull-back in tech and AI stocks broadly across global markets in June and July, now I’m wondering if doomsayers calling SpaceX a market top signal may have been onto something.
Regardless of what you consider SpaceX’s listing price to be, it’s currently at a record low, only four dollars above its original valuation at US$135/sh. One month ago, this company was the focus of literal global attention due to the historic nature of its listing.
Thirty days later, SpaceX seems a bit old news.
Profit-taking or a new chapter?
That’s bad news perhaps for the upcoming Anthropic and OpenAI IPOs which SpaceX was widely viewed as a temperature test for – and with SpaceX’s fairly boring trade sideways over the last few weeks, this finance journalist can’t help but note headlines about Anthropic and OpenAI IPOs feel to have suddenly vanished.
There was the listing of SK Hynix on the NASDAQ late last week to consider. There, the IPO appeared to show investor appetite remains firm for tech stocks tied in with the AI trade.
But looking at SK Hynix’s ADRs on the NASDAQ some 48 hours later, SK Hynix is down -9%, meaning there was only one day of hype – which feels a little short compared to how long Wall Street can keep a bull run going.
Not exactly abnormal behaviour for IPO stocks, but in an already frothy environment, are we finally starting to see Wall Street appetite particularly wane? That’s hard to know, and so is why SpaceX is slowly heading back down to US$135/sh.
But it suggests to me is that the wisdom of the crowd may be thinking SpaceX’s valuation at $135/sh is already pretty bullish. There’s also the fact that as well as being the world’s largest IPO, it was probably also the most criticised.
But there’s also a wider wave of uncertainty in the stock market right now because of US inflation concerns (driving investors back into the USD), the Iran war situation, plus June typically being a good month for sellers.
Still, looking at SpaceX in particular, share price action definitely doesn’t suggest the market’s still got plenty of gas left for an ever-growing list of tech giants.
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